Who Knows What Happened to the Phantom Gamestore? John Landino Knows.

Thu, Dec 18, 2008

When the world at large believes your product is vaporware, your company has never made a cent and your former chairman has been indicted by the Securities and Exchange Commission for promulgating a pump and dump scheme, it's going to be difficult to convince them that you're on the level.

Especially when your company pays its bills primarily by issuing more stock. Especially when your company negotiates all major, recent agreements with companies run by that same former chairman. Especially when it turns out that your new online game distribution network is actually a fresh coat of paint on another company's existing catalog. Especially when the day after that digital distribution network launches, it vanishes into thin air.

But that's not going to stop Phantom Entertainment CEO John Landino from trying. We spoke to Landino yesterday afternoon about what, exactly, happened to the Phantom Gamestore -- and he made every effort to convince us that this time, things are not what they seem.

The Gamestore

When dealing with a company whose chairman allegedly made $400,000 by attracting investment with false promises, the words "We had a successful launch!" on that company's down-for-maintenance screen are liable to set off a few alarm bells. Is that the scheme? Will they "launch" just long enough to bump their stock and call it a day?

But when I spoke to John Landino, he didn't have any prepared excuses for what had happened -- and told me straightaway that the service would be back up and running within "the next day or two."

Furthermore, Landino was entirely up front about the fact that Phantom themselves did not negotiate for the rights to sell the games. "We're working on a new strategy to work directly with game manufacturers," he said. "Right now, the reason we've got the games we've currently got is from a partnership with third parties."

Though the Phantom CEO wasn't willing to disclose the names of those who actually supply their games, the fact remains that if the Gamestore does open within the next day or two -- and this will be quite easy to check up on -- it will go a long way towards proving that Phantom is on the straight and narrow.

The Lapboard

While the Phantom console itself fizzled and died years ago, the company's auxiliary product lived on: the Phantom Lapboard. Four years after being announced, and even after several disappointing reviews, the device still looks fairly slick and has the power to generate a bit of buzz.

Thing is, though they managed to get several units into the hands of reviewers earlier this year, it doesn't seem they've actually had any for sale. But Landino was adamant that has changed. "We'll have the Lapboard shipped from China, out of St. Louis, in January," he said -- and this morning, he informed me that the very first sample packages had arrived. He even provided video proof:

How did Phantom manage to finally pay for a real shipment? Well, that's where things get complicated.

The Company

Landino told me basically what I already knew from the company's press release in August: the most recent influx of money to produce the Lapboard comes from a "separate" company called Phantom Game Service, AKA Phantom Streaming, which "was started to expand on streaming technologies," according to the CEO.

However, there are three rather interesting things to note about Phantom Game Service. One, according to the Division of Corporations for the State of Delaware, PGS was incorporated on August 8th, just three days before the deal. Two, SEC filings show the resulting company is not quite what you'd call separate: Phantom Entertainment now owns 49% of PGS, and gets 7% of their online game revenue.

Three, PGS is run by the same Tim Roberts who was indicted by the SEC in 2006 and resigned from Phantom Entertainment in 2007 -- and both companies share active staff (a web designer and a financial controller) as well.

Meanwhile, what did PGS/Phantom Streaming get in exchange for nearly half of their stock and $65,000 in cash? The very same technologies that are supposedly powering the Phantom Gamestore. Phantom sold them to Phantom Streaming, Phantom Streaming licensed them to GameStreamer -- a company incorporated October 23rd with practically the exact same staff as Phantom Streaming, including CEO Tim Roberts -- and GameStreamer turned them right around to Phantom Entertainment once again for their online store.

When I asked Landino how Phantom Game Service, seemingly a direct spinoff of Phantom, was able to raise the funds, he told us that that PGS had private investors.

The Family?

But according to Landino, Phantom isn't just in business today because of timely investment -- they're still around, he said, because the employees are basically working for free. "We're here because we're invested in the company," Landino told me. "No stock or compensation... we're working hard to turn this company around, for nothing."

Noting some anger in the CEO's voice, I asked how it felt to now have to work with Tim Roberts, widely blamed for the failure of the original Phantom. Perhaps unsurprisingly, he exonerated the former chairman, saying that he was merely "implicated" in the scandal, had paid his $30,000 dues, and that the real crooks had long since left the business.

I'm not sure who to believe. After years of nothing but corporate scandal culminating in this trifecta of tightly knit yet "separate" companies, it's difficult to see Phantom as anything more; but on the other hand, it is remotely possible that the company is finally coming clean, and needs this little bit of... synergy to do so.

It's only a matter of days -- according to Landino -- before we find out.

But is it legal and ethical to bait investors with press releases that proclaim the virtues of corporate deals that are effectively being conducted by multiple facets of the same corporation? We're not qualified to say -- but we'll be investigating the matter soon.

Corporations, Digital Distribution, GameStreamer, John Landino, Phantom Entertainment, Phantom Game Service, Phantom Streaming, SEC, stock, Tim Roberts

This post was written by:

Sean Hollister - who has written 825 posts on GameCyte.

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7 Comments For This Post

pheadbaq Says:
December 19th, 2008 at 8:32 am
Thank you guys for digging deeper on this one.
not suprised Says:
December 19th, 2008 at 10:11 am
typical basher article.
Alexander Galerakis Says:
December 19th, 2008 at 10:17 am
"typical basher comment."
fixed :>
pheadbaq Says:
December 19th, 2008 at 11:50 am
I guess some people don't know how much I actually like Phantom. I didn't think it was a basher article. They're rightfully skeptical, although I feel more sympathetic to the company than they apparently are. I think they insinuated some things and pushed some buttons. But there's more here than in the usual article about Phantom. At least they ride the fence a bit, and at least they made the effort to get with the CEO. They stated honestly that they didn't know who to believe.

By the way, some info on app virtualization and streaming:
http://en.wikipedia.org/wiki/Application_virtualization

http://en.wikipedia.org/wiki/Application_streaming

Bear in mind phantom's been after this for the past six years. Six years ago they saw how this technology could be applied to gaming. That's why I'm still positive about their ideas and the company.
John Landino Says:
December 19th, 2008 at 3:46 pm
Sean was very fair with me on the phone and hopefully someday we have more positive items to discuss. We are doing our best with what we have been left with. There are still more problems than solutions and things could fall apart at any time but we are giving it our best. Lets also be honest about the "stock", we know as well as most people that its a MICRO penny stock on the pinksheets with far too many shares issued...NO PR will make anyone rich. Maybe 10K worth of shares traded that day. The PR is used as it should to tell our current and potential shareholders what we are doing.

Sean was the ONLY person who contacted me via phone. I rarely dont return email or calls, at least he wrote what he thought based on a conversation rather than the usual negative babble every other site copies from each other.
Sean Hollister Says:
December 19th, 2008 at 5:05 pm
@Pheadbaq, John Landino:

I greatly appreciate and am actually rather astounded by the support. Your honesty is commendable.

One thing though: unless I'm reading the chart wrong, the stock moved 83 million shares on December 15th, the day of the press releases, and 78 million shares the day after that. That's still peanuts when multiplied by its price, I suppose, but the PR did have an effect.
ezraeatsit Says:
January 21st, 2009 at 10:49 am
an interesting tidbit might also be that Tim Robert's sister happens to be married to John Landino's father

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